I. Walmart and Kohl’s Hit with Record Fines by the FTC in the US
In recent years, consumers have become increasingly mindful of the environmental impact of their purchases. Many businesses have responded by marketing products as “eco-friendly,” “sustainable,” or “low-impact.” But while such claims may appeal to environmentally conscious buyers, they also carry significant legal risks.
In 2022, U.S. retail giants Walmart and Kohl’s agreed to pay $3 million and $2.5 million respectively in penalties to resolve allegations by the US Federal Trade Commission (FTC) that they falsely marketed rayon textile products as “100% Bamboo” and made deceptive environmental claims, including labeling them as “eco-friendly & sustainable” and “gentle on the planet.”[1]
The FTC argued that rayon production involves toxic chemical emissions, and that these retailers’ claims misled consumers into believing the products were environmentally beneficial. The misleading statements amounted to greenwashing, violating Section 5 of the FTC Act (15 U.S.C. §45), which prohibits unfair competition by deceptive practices.[2] Ultimately, Walmart and Kohl’s paid $3 million and $2.5 million in civil penalties respectively,[3] the largest fines in this area imposed in the US to date,[4] sending shockwaves across the retail and marketing industries.
II. What is Greenwashing?
The term greenwashing was coined in the 1980s by environmentalist Jay Westerveld, who criticized a Fijian resort for urging guests to reuse towels to “help the environment,” while the resort was expanding its facilities in ways that harmed the environment.[5] The term combines “green” and “whitewashing” to describe marketing that creates a false impression of environmental responsibility.[6]
In essence, greenwashing occurs when companies portray products or operations as more sustainable than they actually are, misleading consumers into believing their choices benefit the planet.
III. Worldwide Development of the Anti-Greenwashing Trend
- Recent “Greenwashing” Cases in the Netherlands and Germany
Cases of greenwashing have emerged worldwide. In October 2023, the Dutch Advertising Code Committee ruled that the international fashion retailer PRIMARK’s slogans, including “Reducing CO2 emissions by 50%” and “So the earth can breathe” were misleading. The regulator noted that PRIMARK’s statements referred only to future aspirations, without any concrete plan, thereby misleading consumers into believing the company had already achieved significant environmental progress.[7]
Similarly, in June 2024, Germany’s Federal Court of Justice decided that packaging chewing gum with the label “climate neutral” (klimaneutral in German) was misleading. The court reasoned that the company relied solely on purchasing carbon offsets, rather than actually reducing emissions in its production process, and failed to disclose this important context to consumers. The ruling made clear that the use of vague or incomplete environmental terms in marketing can constitute deceptive advertising.[8]
The cases from the United States, the Netherlands, and Germany show that regulators are steadily tightening their oversight of greenwashing practices. This invites consideration of how other jurisdictions, and Taiwan in particular, are developing their own regulatory frameworks.
- Regulatory Trends in the UK and the EU
Given the increasing weight that “environmental” and “sustainability” factors carry in consumer choices, countries worldwide are increasingly establishing legal guidelines or explicitly setting forth compliance regulations to curb the corporate practice of greenwashing.. In the United Kingdom, the Advertising Standards Authority (ASA) has issued detailed guidance titled Advertising Guidance – misleading environmental claims and social responsibility, reminding businesses that sustainability claims must be accurate, substantiated, and not presented in ways that could mislead consumers.[9] This guidance ties into the broader UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (CAP Code) and UK Code of Broadcast Advertising (BCAP Code).[10]
The European Union has also moved in this direction. In 2023, it adopted the Empowering Consumers for the Green Transition Directive, which prohibits environmental claims that cannot be substantiated with clear and verifiable evidence. Member states are required to transpose the Directive into national law by 2026, signaling that compliance standards across Europe will soon become stricter and more harmonized.[11]
These regulatory trends reflect a broader shift, where environmental claims in advertising are no longer treated as mere marketing slogans. They are increasingly scrutinized as representations of fact, with corresponding legal consequences if they mislead consumers.
IV. Taiwan’s Legal Framework on Anti-Greenwashing
- Existing Regulations against Misleading Claims
Unlike the United Kingdom and the European Union, Taiwan does not yet have a dedicated law that specifically addresses greenwashing. However, existing legislation on false or misleading advertising already provides a basis for enforcement. Both the Fair Trade Act and the Consumer Protection Act contain provisions that can be applied to environmental marketing claims. The Fair Trade Commission has stated that it will investigate green marketing claims where evidence suggests a discrepancy between promotional language and actual facts, consulting the Ministry of Environment for technical input if needed.[12]
Under Article 21 of the Fair Trade Act, businesses are prohibited from making false or misleading representations or indications on their goods, in their advertisements, or by any other means made known to the public, regarding matters related to their goods or services that are material to a consumer’s purchasing decision. These matters are not limited to product quality, content, or manufacturing methods; they extend to any feature likely to affect consumers’ trading decisions. Given that environmental impact has become a key factor for many consumers, sustainability-related claims in advertising may readily fall within the scope of Article 21. For example, Taiwan’s Fair Trade Commission has held that whether a product carries an official Energy Label can significantly influence consumers’ trust in the product’s efficiency. Companies that have improperly used or misused such labels have therefore been sanctioned for misleading advertising under the Fair Trade Act.[13]
The Consumer Protection Act provides another layer of protection. Article 22 requires businesses to ensure the accuracy of the contents of advertisements and obligates them to provide not less than what is stated in the advertisements. If a business deliberately violates this obligation, consumers may seek punitive damages of up to five times the actual loss. In cases involving fraud, consumers also may rescind their contracts and demand refunds under the Civil Code.
- FSC’s Anti-Greenwashing Guidelines
In addition to the general statutory provisions mentioned above, Taiwan’s Financial Supervisory Commission (FSC) issued the Guidelines on Anti-Greenwashing for Financial Institutions in May 2024.[14] Although not legally binding, the guidelines emphasize the regulator’s expectations and signal possible legislative directions.
These guidelines caution financial institutions to avoid greenwashing—specifically circumstances where claims are inconsistent with reality or where information asymmetry exists—when externally promoting the institution itself, or its financial products and services, as “green” or “sustainable.” The guidelines further provide specific guidance for product marketing and promotion. For example, the guidelines advise that sustainability claims should:
- Be truthful, accurate, and supported by sufficient, verifiable evidence.
- Avoid vague or overly broad language.
- Disclose (and not conceal) all material information.
- Ensure fairness and comparability when making comparative claims.
Although these guidelines currently apply only to financial institutions, they reflect Taiwan’s increasing regulatory sensitivity to greenwashing and may influence other government agencies’ approaches. Currently, the Fair Trade Commission, which oversees misleading advertising, has not issued specific guidance on this issue. Until the Fair Trade Commission provides concrete written guidance, businesses may refer to the FSC’s Anti-Greenwashing Guidelines as a practical reference when launching environmentally related marketing campaigns, to help reduce the risk of inadvertently violating the law.
- Case Study and Analysis in Taiwan
For example, in 2018, many businesses in Taiwan marketed products such as tableware and straws made of “biodegradable plastics,” claiming that they would naturally decompose and were therefore more eco-friendly than conventional plastics. However, environmental groups later revealed that these products were primarily made of polylactic acid (PLA), which is, in fact, no more environmentally friendly and may even pose a greater hazard to the environment than conventional plastic.
PLA can only be decomposed under specific industrial composting conditions (e.g., it must be buried in soil at temperatures exceeding 55〫C and humidity levels between 80% and 90%). Given the lack of such decomposition mechanisms and environments in Taiwan, PLA products can only be treated as general waste. Worse still, mixing PLA with PET plastics disrupted recycling streams, lowering the value of PET recycling.[15]
By promoting PLA products as merely “biodegradable” or “eco-friendly,” without clarifying the strict requirements for decomposition, companies risked violating Taiwan’s Fair Trade Act by misleading consumers. With reference to the FSC guidelines, such practices are misleading due to vague terminology and omitting essential information.
V. Conclusion
As global enforcement against greenwashing intensifies, companies should pay close attention to changes in regulations when exporting products abroad. In Taiwan, companies should also keep an eye on recent developments, particularly whether the FSC’s newly issued Anti-Greenwashing Guidelines may influence other government agencies and prompt broader regulatory or legislative action.
This is a translation of the original article in Chinese, which can be found here.
For more information on laws and regulations related to advertising and marketing, please contact Ling-ying Hsu at lhsu@winklerpartners.com.
Written by Ling-ying Hsu, Helen Chen, and Jing-Min Huang.
Translated by Jing-Min Huang.
[1] See US Federal Trade Commission (2022/04/08), FTC Uses Penalty Offense Authority to Seek Largest-Ever Civil Penalty for Bogus Bamboo Marketing from Kohl’s and Walmart (https://www.ftc.gov/news-events/news/press-releases/2022/04/ftc-uses-penalty-offense-authority-seek-largest-ever-civil-penalty-bogus-bamboo-marketing-kohls).
[2] 15 U.S. Code § 45 – Unfair methods of competition unlawful; prevention by Commission (https://www.ftc.gov/legal-library/browse/statutes/federal-trade-commission-act; https://www.law.cornell.edu/uscode/text/15/45).
[3] See United States Department of Justice (2022/05/05), Kohl’s and Walmart Agree to Pay $5.5 Million in Combined Penalties for Alleged Deceptive Violations of the Textile Act and Rules and FTC Act Around the Use of Bamboo (https://www.justice.gov/opa/pr/kohl-s-and-walmart-agree-pay-55-million-combined-penalties-alleged-deceptive-violations).
[4] Supra note 1.
[5] See Anna Francesca Macesar (2024/03/01), The History of Greenwashing (https://thesustainableagency.com/blog/the-history-of-greenwashing/), which has been updated on April 18, 2025.
[6] See Taiwan Economic Journal (2022/11/24), What is “Greenwashing”? Exposing the Green Villain (https://www.tejwin.com/insight/漂綠是什麼揪出綠皮惡魔/).
[7] See Dutch News (2023/10/25), Primark green claims “misleading”: Dutch advertising watchdog (https://www.dutchnews.nl/2023/10/primark-green-claims-misleading-dutch-advertising-watchdog/).
[8] See Andreas Bauer (2024/07/09), Update on advertising using ‘climate-neutral’ statement: First decision of German Federal Court of Justice (https://www.taylorwessing.com/en/insights-and-events/insights/2024/06/update-in-sachen-klimaneutral).
[9] UK Advertising Standards Authority (2023/06/23), Advertising Guidance – misleading environmental claims and social responsibility (https://www.asa.org.uk/resource/advertising-guidance-misleading-environmental-claims-and-social-responsibility.html).
[10] UK CAP Code §03 – Misleading advertising (https://www.asa.org.uk/type/non_broadcast/code_section/03.html) and UK BCAP Code §03 – Misleading advertising (https://www.asa.org.uk/type/broadcast/code_section/03.html).
[11] European Commission (2024/03/27), New EU rules to empower consumers for the green transition enter into force (https://energy.ec.europa.eu/news/new-eu-rules-empower-consumers-green-transition-enter-force-2024-03-27_en).
[12] See Economic Daily News (2024/05/27), Net-Zero Emissions Become a Hot Topic; FTC: Greenwashing… Maximum Fine NT$25 Million (https://vip.104.com.tw/preLogin/recruiterForum/post/163764).
[13] See Taiwan Fair Trade Commission, Dispositions Nos. Gong-Chu-111005, 112011, 112022, and 112077, as examples of related cases.
[14] See Financial Supervisory Commission (FSC), Guidelines on Anti-Greenwashing for Financial Institutions (https://esg.fsc.gov.tw/Cms_Data/Contents/FSC/Media/Files/news-release/%E9%87%91%E8%9E%8D%E6%A9%9F%E6%A7%8B%E9%98%B2%E6%BC%82%E7%B6%A0%E5%8F%83%E8%80%83%E6%8C%87%E5%BC%95.pdf).
[15] See Greenpeace East Asia (2021/03/03), Debunking ‘Biodegradable Plastics’: Production, Use, and Environmental Impacts (https://issuu.com/greenpeace_eastasia/docs/2021-biodegradable-plastic-report-zh), and Public Television Service (PTS) News (2021/09/19), Environmental Groups Expose PLA ‘Eco-Myths’; EPA: Decomposition Only Under Specific Conditions (https://news.pts.org.tw/article/545392).